How long have you been coming to the region for?

I’ve been teaching here for at least eight years but I’ve been out here for tourism before that.

In the wake of the global meltdown, what factors do you think are going affect the region, and what will their impact be?

I think the region will be impacted – whether it’s impacted as adversely as, say, the UK or America is certainly yet to be seen. It’s certainly not immune from the global shocks that we’re seeing. If one thinks of stock markets, stock markets are all interrelated so the markets will be affected by the crashes that we’ve seen worldwide. In terms of employment, the region will obviously be protected by its oil revenues. What happens to the oil price will be impacted by the world economy generally, so a slowdown in the world economy will impact on the oil price and will therefore impact on the world economy. So, yet another interrelationship there.

Bond markets are now issuing local currency bonds, and there are calls to create a central currency for the Gulf. Are these sensible or protectionist measures?

First of all, you’ve mentioned protectionism. We’ve learned from the crash of the depression of 1929 that protectionism is bad for the world economy. So protectionism is not to be abdicated. And the local market is very much dependent on local trade. It doesn’t just survive by itself; it isn’t part of the global trade environment. So I don’t think protectionism will be good for the region. Whether it’s time to de-peg from the dollar; curiously it has been strengthening in recent months because of its safety so the dollar provides a measure of security and safety in times of turmoil. So, maybe now is not the time to be de-pegging from the dollar because of its consistency. In terms of finance, I think raising funds locally would make a lot of sense for a lot of companies. It’s a natural development for the economy. Dubai is developing, so that will be a natural extension anyway, perhaps accelerated by the recent turmoil.

Higher oil prices ensure revenues. What factors will Gulf states have to consider over the net 6-12 months?

Over the next six to 12 months there is very little they can do unless they can influence the price of oil itself by cutting production and controlling it, such as OPEC are discussing … but that just shows the problem of being dependent on just one source of revenue, and if that sort of revenue is affected by world markets then you are ultimately going to be affected. I think, to be fair to these economies … people have gotten used to that environment. So, although we’ve fallen back, we’re at the same place we were at last year. So those economies should still be strong, but not as strong as we’ve seen. They still run the risk of being dependent on oil.

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